With the U.S. healthcare system rising to the top of political discourse, one topic remains imperative: the impact on patients. At a time when the burden of medical costs has shifted onto individuals more than ever, young tech company Parasail Health is charting a new course by putting patients back into the healthcare equation and allowing them to better plan and manage their expenses.

Photo courtesy of Parasail Health.

The idea for Parasail was originally hatched by Todd Kimmel, the company’s chairman and founder of Montage Ventures, and at first, it remained only a theory in the mind of CEO and Co-Founder Adam Tibbs. But when Tibbs’ wife dropped a knife on her foot in the middle of the night, resulting in several severed tendons and more than $12,000 in medical bills, the idea for Parasail took off.

“It was an ah-ha moment. What do people who don’t have 12,000 bucks do?” said Tibbs in a recent interview with TrueBridge. “That’s when we started digging into the problem from the patient’s perspective and realized the scale of the challenge for everyone involved. Thirty-six percent of people in the U.S. now have high deductible healthcare plans, and half the people who have these plans can’t handle a $400 bill in any given month.”

According to Tibbs, two major factors have converged to create a perfect storm not just for patients in the U.S. but also for their providers.

The first is macroeconomic trends. As healthcare has become more expensive, insurance premiums have risen commensurately. But, as Tibbs argues, premiums have reached a tipping point. If premiums were to cover the care we need, they would be completely unaffordable: “So as a result, you have to decrease benefits in order to keep premiums affordable, resulting in high deductible plans,” he said.

Then there is the Affordable Care Act, which has brought more people under insurance coverage, but a significant number of which are high-risk and need lower premiums. The combination of higher premiums with more insured people who cannot afford them means a one-two punch for patients and providers: patients are paying significantly more for medical costs – approximately 41% of every healthcare dollar, according to Aetna CEO Mark Bertolini – while increasing portions of medical bills go unpaid.

“Doctors used to get the bulk of their revenues from payers. Healthcare is a $3 trillion system created for payers, with massive technological infrastructure to support it,” said Tibbs. “The challenge is that the entire system is built without regard to patients’ perspectives. Until now, it didn’t need to take that into consideration—they were part of care, but not a financial component.”

This is where Parasail can help, with a healthcare loan and payments solution that addresses the pain points of both patients and providers.

The company has created a platform that better enables patients to plan, manage and pay for their medical bills, primarily by offering low-cost loans to typically high-risk borrowers, who traditionally would not be able to secure the capital they need for a procedure they did not anticipate.

Its partnerships are the crux of Parasail’s unique advantage as a lender. Because providers and billing companies recognize the risk of their bills going uncollected, they are willing to pay part of the loan cost to Parasail—allowing Parasail to offer its loans at extremely attractive rates to borrowers with an immediate need.

“The consumer loan market is about shopping for the best price—it all comes down to the math. This is different,” said Phin Upham, Principal at Thiel Capital and an early investor in Parasail. “Parasail solves an immediate need by working to minimize the costs and reduce the friction between patients, doctors and insurance companies. With the loan comes a service that reduces complexity and can add substantive value.”

Parasail’s integration with billing companies and providers is another key component of Parasail’s go-to-market strategy. Rather than see itself as a competitor with these parties, Parasail integrates with its partners to provide an additional payments option to patients. Currently, Parasail has signed contracts with over 700 providers and built out integration capabilities for at least 15 channel partners.

Parasail collaborates with providers and partners to bundle suites of bills invoiced to patients – allowing them to view and dispute the bills, as needed – into a consolidated payment, making the payments process as efficient and transparent as possible.

“And in just a few clicks, that nightmare of a process becomes much easier,” said Tibbs.

While there are many lending options available to patients for elective procedures – that is, procedures that patients can plan for in advance – few companies like Parasail exist to help patients finance non-elective procedures, which result from unfortunate circumstances that no one could anticipate. By addressing the unmet needs of a specific group of patients and increasing their ability to pay bills in full, Parasail benefits the patients as much as it does their providers.

“The lending space has seen a readjustment over the last 12 months, and winners have emerged in clear verticals. We liked Parasail because it’s one of the only companies in the non-elective space, it targets an underserved customer, and its borrowers have a specific reason for taking out a loan,” said Upham. “No one else has the breadth of vision that Parasail has, and the team is experienced in solving hard problems in regulated spaces.”

As the dialogue surrounding the U.S. healthcare system is sure to remain heated, companies like Parasail are inserting themselves into the narrative and using technology to address a clear need in a critical industry.

“There’s a lot of low-hanging fruit out there. A bunch of companies are coming in to make the billing and collections process better. But to us, it doesn’t matter how easy you make payments if the funds aren’t there in the first place,” said Tibbs. “This shift to patients paying such a huge percentage is relatively new, and I think people will lock onto this as a real problem.”

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